Page 9 - CIMA SCS Workbook August 2018 - Day 1 Tasks

Chapter 3

FINCH NEWS GROUP -

FAMILIARISATION

1 INTRODUCTION

It is absolutely crucial that you completely familiarise yourself with the pre-seen information prior
to attempting the Case Study exam. Merely reading through the materials is unlikely to be
sufficient and it is also important that you consider which aspects of the three technical subjects
may be useful and relevant for the Case Study.

The exercises in the following three chapters will help you to gain a thorough understanding of
the Case Study scenario and ensure you are fully prepared to attempt the Practice Tasks later in
this Workbook.
Solutions to these exercises are provided but are not exhaustive. It is important that you attempt
the exercises yourself and makes notes of your answers before reviewing the solutions.

2 OVERVIEW OF PRE-SEEN

The pre-seen for the August 2018 Strategic Case Study involves a company called Finch News
Group (FNG) – a newspaper publishing company. It is located in the country of Borland, and you
are a senior manager, reporting directly to the Chief Finance Officer.

FNG was founded over 130 years ago, and 60% of the issued share capital is owned by members
of the founding family. It is a private limited company, and 2 members of the Finch family are on
the Board of Directors – Alan Finch, non-executive Chairman; and Mary Finch, Chief Operating
Officer. They both own 8% of the issued share capital, and so the remaining 44% of shares in Finch
ownership are simply shareholders, not directors.
FNG currently produces 40 local newspapers, and has done since 1992. It has 30 regional offices
and 2 print factories, 1 in the North of Borland and 1 in the South.
In the newspaper industry, revenue is generated in a number of ways: sales of newspapers (either
rd
in printed format or digital); advertising; contract printing (using spare capacity to print for 3
parties); and event hosting (promoting, organising and hosting events). FNG is involved in all
except the last of these.
Since the late 1990s, the newspaper industry has been experiencing significant change.
Historically most revenues came from sale of printed copy and selling advertising space. However,
the growth of digital technology has changed this; not only are many people accessing free news
online (and therefore not needing to buy a paper); but those who spend on advertising have been

KAPLAN PUBLISHING 5